US jobless claims fall to lowest level since pandemic began
The number of people filing for unemployment benefits in the US fell to its lowest level since the coronavirus pandemic began, new data from the US Labor Department has revealed.
Last week, there were 881,000 jobless claims, down 130,000 from the week before. The drop was larger than expected, with a Reuters poll predicting 950,000 claims.
However, the figure was calculated using a different methodology to previous weeks, meaning that the numbers may not be compatible.
The department said last it was switching to using additive factors to more accurately track seasonal fluctuations in the series.
It said in the presence of a large shift in the claims series, the multiplicative seasonal adjustment factors, which it had been using, could result in systematic over- or under-adjustment of the data.
In addition, alongside the headline figure, the number of claims by those not in regular work – including freelancers and part-time workers – jumped to 759,000 claims, up from 607,000 last week.
The new figures come amid fears that the US’ economic recovery is stalling, with lawmakers still at loggerheads over the next round of government stimulus.
Richard Flynn, the UK managing director of financial services firm Charles Schwab, said that without further unemployment benefits the recovery would be “highly uncertain”.
“Many Fed officials have been urging Congress to pass more fiscal relief, as that would likely have a more immediate effect in boosting growth, employment and inflation”, he said.
“In the meantime, we expect the Fed to keep short-term interest rates low for several more years, and the U.S. dollar to weaken further over time.”
More than 22m Americans lost their job due to the pandemic, which saw large swathes of the economy shut down due to health concerns.
Thus far, 9m of these have been rehired, with new data on the job market expected tomorrow.
Analysts believe that the new figures will show a decline in August from last month’s double-digit rates.